The Government is freezing the pay of public servants earning over 100,000 for the next three years, with increases to be targeted at lower paid workers.
Last year the Public Service Commissioner Peter Hughes issued guidance to public service agencies asking them to give minimal or no pay increases to public servants until June 2021.
The Public Service Commissioner updated the guidance on Wednesday to make clear that pay restraint will need to continue across the public service for the next three years.
Public Service Minister Chris Hipkins said any increases will be targeted at the lowest-paid workers, largely those earning below $60,000, who account for about 25 percent of the public sector.
"The public service is doing a good job implementing the Government's COVID-19 response, and we ask they lead the way in supporting the Government as we ensure our spending is targeted to where it is needed most," Hipkins said.
"The Public Service Commissioner, who sets the pay of public service chief executives, will also not be increasing their pay."
Finance Minister Grant Robertson said as the COVID-19 recovery gets underway, he's keeping a close watch on debt taken on to support the economy.
Treasury's latest update showed the Government is more than $100 billion in debt due to COVID-19.
"Just as businesses are making decisions as they plan for the recovery, our responsible economic approach means the Government is faced with choices about where new spending is targeted."
Last year the Remuneration Authority, which sets the pay for Members of Parliament, decided that MPs and ministers would not be getting pay rises for three years due to the COVID-19 economic environment.
Prime Minister Jacinda Ardern announced in April last year that she and other ministers, as well as public sector bosses like Director-General of Health Dr Ashley Bloomfield, would take a 20 percent pay cut for six months.
As the salaries of elected politicians and senior public officials are set according to the Remuneration Authority Act 1977, the Government passed an amendment to enact the temporary pay cuts.
ACT leader David Seymour proposed two amendments - one that would make the pay cuts compulsory, and another that would have made public which MPs opted to take pay cuts - but they were voted down.
Labour said at the time the Government's position was that the Remuneration Authority should have the ability to consider each circumstance of the person having their pay cut.
The Prime Minister's salary is $471,049 while Dr Bloomfield, one of the highest paid public service chief executives, earns around $528,000.
